“So far in 2009, what are the the most important thing I had learned about investing, trading, and/or the markets?”
Success takes longer than expected
- That you must learn to trade and trust yourself and not to become so dependent on the opinions of others, which ultimately keeps you from becoming the best you can be
- Keep it simple
- The very best profit opportunities occur in the midst of extreme emotional sentiment
- Always think opportunistic verses too bullish or bearish
- Persistence and dedication to a daily routine is key
- Developing an edge is the first step for trading successfully. Without that, disciplined trading will only make sure you gradually losing money
- The market is one unforgiving bitch!
- It is challenging to find non-correlated markets
- You have to respect the market even if you think it is under some kind of manipulation
- Keep your eyes open and powder dry
- If you fall in love with a stock keep 100 shares and let the rest go
- I’ve learned to be patient in waiting for my patterns to appear
- The value of ETFs
- The importance of finding special situations that will be profitable no matter what the market does
- Stay away from light volume when the only thing trading is the black boxes
- The importance of focusing only on one technical setup in order to improve one’s skill set
- I now think that buy and hold is a serious mistake
- Think big and think long term
- Don’t try to predict the markets
- Don’t be afraid in bear markets, just another opportunity
- The odds are stacked against the retail investor
- There’s no such thing as a sure thing
- The harder I work at it the more likely I am to succeed
- Conserving one’s capital is vital
- I know the rules – I just need to notch-up my discipline
- Smaller entry positions can be helpful
- Opportunities are everywhere
- The market is primarily psychologically driven
- Trade with the trend instead of trying to pick tops and bottoms
- Know where and when to get out before you get in
- As Johny Cash put it “You got to walk that lonesome valley, you got walk it by yourself. Nobody else can walk it for you. You got to walk it by yourself.”
- The difficulty of avoiding over-optimization/curve fitting
- Overtrading can be, and often is, a recipe for disaster
- To breathe before executing a trade
- Trading is not a profession for pessimists
- Never feel confident even when winning. Humility is a good thing
- You need to be quick and brutal with the trading decisions
- It is okay to sit out a potential move – risk management over reward chasing
- Don’t bet the farm in either direction
- There is no consistent logic to trading the market
- Some trades need to be taken when they appear, not just when you are ready
- There’s no rule that quality stocks must go up
- Don’t chase any overbought stocks
- When a sector (like financials) look so hopeless as it did in March there is potential to make a lot of money if things turn around even just a little
- Hope is a four-letter word and has no place in a trading strategy
- Patience. It is ok to sit out once in awhile
- Wait until you have an proven strategy supported by data before trading for keeps
Anything can happen. Trading is all about probabilities
Technically Yours-ANIRUDH SETHI ,BARODA ,INDIA
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What Does A Trader Do ?
One thing that I couldn’t accept as an attorney (for the five minutes I seriously considered that as a profession) was that I’d be confronted with the temptation to make money from projects and clients with whom I did not want to work. The wealth that is created from doing a law-job is wealth that comes from the support of, allegiance to, and active promotion of a client’s business. (more…)
3 Points – Trading Psychology
Don’t Dwell on Mistakes, Focus on Opportunities
- Holding onto the baggage of the past, the mistakes of yesterday, is nonproductive. If robs you of your energy and mental and emotional focus on new opportunities. You must see what opportunities exist now and take advantage of them… Focus your time, energy, and money on making money — on new trading opportunities.
- Yes you need to learn from your mistakes, but don’t dwell on them. Use them as positive learning experiences; as a springboard to becoming a better trader.
Don’t Blame the Market or Others
- When pain surfaces, if you are honest and in touch with yourself, you will own the upset and seize the opportunity to release that internal reality — to forgive! Pain functions to inform us of our errors.
- False forgiveness is based on the belief that others are responsible for what we feel, and therefore it tends to reinforce that error. To forgive others, in this manner, for what happens in your mind leaves your pain intact and the opportunity to heal is lost.
- Making use of every opportunity to heal is an important decision you can make and that decision will immeasurably accelerate your process.
Accept Negative Emotions to Neutralize the Negative Charge
- Whenever we avoid processing a negative emotion, then attach an emotional charge to it, and shorten our breath and tighten our diaphragm, our blood pressure often shoots up so that we lock that memory of that emotional charge into our system.
- When you go to sleep, the current in you literally reverses and you lock your daily emotional charges into your organ systems, body processes, and memory. It’s a very negative thing to do.
- Processing the situation correctly short-circuits the negative cycle. So, before I go to sleep at night, I forgive others whom I think have wronged me and give thanks personally for all things. I want to stay free, healthy, and unencumbered.
- Remember, emotions are a choice. The realm of unconscious bad habits is where the demons live in all of us. We need to exorcise them.
Learning to do nothing
This is a lesson I keep needing to come back to. I can see that trading for amusement has been my own downfall a thousand times in the last few years, and to just sit at the sidelines can be painful.
I just read a brilliant quote by the trader John Piper.
“Once able to trade, it is very likely that a person will make the emotional decision to do just that when bored. This timing is unlikely to correspond with a low risk trading opportunity.”
“Once able to trade, it is very likely that a person will make the emotional decision to do just that when bored. This timing is unlikely to correspond with a low risk trading opportunity.”